James Kirkup says the Budget was an astute defensive exercise which
hints at rather limited Conservative ambitions

Any Conservative looking for a game-changing display of fiscal pyrotechnics would have been disappointed by George Osborne’s last Budget of the Parliament. There were no big, noisy retail-politics promises to grab public attention and instantly change minds. Instead, it was steady-as-she goes package, with more help for those groups the Conservatives have already identified as the most electorally deserving of help: first-time buyers, older people with savings, workers of all incomes, including those on £40,000 and more. Tory excitements like cuts in inheritance tax will have to wait for the manifesto.

Given the constraints of the coalition with the Liberal Democrats, the limited package was no surprise. Nor, given the imminence of the general election, was the overtly and almost aggressively political nature of the Budget.

It was Mr Osborne who gave the word “weaponise” to the British political lexicon, and he proved that he is willing to use just about anything that comes to hand to wound the Labour Party. So he’s spending £1 million of public money on celebrating the anniversary of the Battle of Agincourt, largely so he could make a joke about a noble English king seeing off an unholy alliance of continental socialists and Scottish nationalists. In more questionable taste was his announcement of a “review” into deeds of variation, the legal device the Miliband family may have used to reduce tax liabilities on an inherited home. Somehow, British politics has become a place where it’s acceptable to use government resources to make jokes about a death in your opponent’s family.

It’s a commonplace of Budget commentary to talk about Chancellors shooting their opponents’ foxes. The image is as apposite as ever for Mr Osborne, though it needs updating for the age of American Sniper. With clinical detachment, the Chancellor methodically locked his laser sights on Labour plans and dispassionately picked them off one by one.

So various tax loopholes identified by Labour as revenue raisers that could fund Opposition plans will be closed in Mr Osborne’s plans. The lifetime allowance for pension pots will fall from £1.25 million to £1 million. Another headache for the pensions industry, and hardly an incentive for high-earners to save more. But Mr Osborne had another objective. Labour too has promised such a move, pledging to use the additional money raised to fund a cut in tuition fees. How will Mr Miliband fund his key youth-pleasing policy now?

We heard more too about the Northern Powerhouse, Mr Osborne’s push to give more money and power to the marginal-rich north-west of England. It’s an agenda that’s creating no end of turmoil in Labour ranks, as local Labour leaders around Manchester welcome the Tory chancellor’s plans, to the chagrin of their party colleagues in London.

The biggest news of the Budget was also all about Labour. Mr Osborne has moved to shut down what he evidently believes was Labour’s most powerful attack on the Conservatives, the suggestion that they would take public spending “back to the 1930s.”

That attack was based on figures in last year’s Autumn Statement showing Mr Osborne would eventually reduce state spending to 35.2 per cent of GDP, the lowest level for 80 years. Never mind that state spending before and after the foundation of the NHS and the welfare state aren’t really comparable. That was enough for Labour to make the argument that the Conservatives are hellbent on an ideological drive to shink the state. What followed were colourful, hyperbolic and largely specious suggestions about the end of the NHS and a return to leaving school at 14.

The Conservatives had impatiently pushed back against those allegations, but Mr Osborne’s Budget tacitly admitted that the Tories were losing the fight. The 1930s attack was hurting them, and had to be stopped.

So the Chancellor announced that much of the fiscal windfall he’ll receive from lower interest rates and higher growth will, once the deficit is closed, be spent by central government in the traditional way. After years of stringency, the state will enjoy a bumper year at the decade’s end. Total state spending is £737bn this year. In 2018/19 it will be £759bn. But in 2019/20 it will jump to £797bn. Austerity ends not with a bang but with a splurge.

The result will be that state spending as a share of GDP will not fall below 36 per cent but stabilise at the same level it was in 2000 when Gordon Brown was in the Treasury. A rather harder target for Labour to attack then.

But what does that say about Conservative ambition? In the autumn, when the “1930s” plans were published, Tories showed neither shame nor regret; some even celebrated signs that their leadership was prepared to break with the recent Labour-driven consensus that state spending is virtuous, meaning cutting is bad. The Conservatives would fight the election proudly promising to cut Leviathan down to size.

This Budget rewrites that history, expunging from the record any suggestion that the Conservatives believe in cutting for cutting’s sake. Mr Osborne, political marksman par excellence, has shot a very large Labour fox, but he has done it because the beast was sinking its teeth into his leg. A careful and largely defensive Budget from a Chancellor with an eye not just for his opponents’ weaknesses, but his own side’s too.